Microsoft plans to invest nearly $80 billion in fiscal year 2025 to expand its data centers to train artificial intelligence (AI) models and deploy AI and cloud-based applications, the company announced in a blog post on Friday.
The increase in AI investments follows OpenAI’s launch of ChatGPT in 2022, which spurred demand for integrating AI into products and services across industries.
Developing AI models requires significant computing power, increasing the need for specialized data centers capable of interconnecting thousands of chips in clusters. Microsoft has committed billions of dollars to expand its AI infrastructure and enhance its network of data centers.
More than half of the $80 billion investment will be allocated to the United States, Vice President and President Brad Smith said in the blog post. “Today, the United States is leading the global AI race thanks to private capital investment and innovations by American companies of all sizes, from dynamic startups to established corporations,” Smith said.
Analysts expect Microsoft’s fiscal 2025 capital expenditures, including capital leases, to reach $84.24 billion, according to Visible Alpha. In the first quarter of fiscal 2025, the company’s capital expenditures increased 5.3% to $20 billion.
As a primary supporter and exclusive partner of OpenAI, Microsoft is the leader among major technology companies in the competitive AI sector. This partnership strengthens the company’s position as it continues to drive innovation in the field of artificial intelligence and cloud services.